JLL Partners Inc., a 26-year-old private-equity firm based in New York, boosted the cash it has returned to fund investors since the start of last year to $1.7 billion by completing two deals this week, according to William Miles, the head of investor relations.
JLL garnered $731 million when drug producer Patheon Inc. wrapped up a merger yesterday with vitamin maker Royal DSM NV’s drug business, generating about a 200 percent gain on its equity investment, Miles said in a telephone interview. On March 10, the firm recouped almost half its $85 million investment in BioClinica Inc. when the clinical researcher was recapitalized and merged with a competitor.
The transactions capped the biggest spurt of money harvesting in the New York-based firm’s history, Miles said. Like Blackstone Group LP, KKR & Co. and other big buyout firms, JLL and its fellow mid-size shops are taking advantage of a surge in asset values to lock in investment gains across their holdings. The capital JLL returned in the last 15 months was $300 million more than its tally from 2010 through 2012.
“We benefited from a robust environment,” JLL co-founder and managing director Paul Levy said in an interview. “The fact that rates are so low enables buyers to finance with debt at very attractive rates.”
Since the start of 2013, JLL has profitably exited window maker PGT Inc. and NetSpend Holdings Inc., a provider of reloadable prepaid debit cards, Miles said. It also reaped gains recapitalizing and taking public JGWPT Holdings Inc., which offers cash for legal settlements and lottery payouts under the J.G. Wentworth brand.
The sales come as JLL gathers commitments for a new fund with a $1 billion target, according to two people familiar with the matter. JLL manages about $4.2 billion across six funds.
The firm’s previous fund, gathered in 2008, generated a 16 percent net internal rate of return as of June 30, according to data compiled by Bloomberg. Miles and Levy declined to comment on JLL’s fundraising.
In the Patheon transaction, JLL led a group that invested $500 million for a 51 percent stake in DPxHoldings BV, a joint venture with Heerlen, Netherlands-based Royal DSM, the companies said yesterday in a statement. JLL’s 2008 fund put up $200 million, with co-investors, management and JLL’s partners providing the rest, Miles said. Headquartered in Durham, North Carolina, DPx will have about $2 billion in sales and 8,000 employees, according to the statement.
JLL in 2007 invested $150 million in Patheon through the firm’s 2005 fund, which later increased the amount to $244 million. The Royal DSM deal yielded more than a $480 million profit to investors in that fund and to the JLL partners.
In the transaction completed March 10, JLL merged Newtown, Pennsylvania-based BioClinica and CCBR-Synarc, a Newark, California-based clinical services provider backed by Water Street Healthcare Partners LLC, a Chicago-based private-equity investor. JLL invested in BioClinica in March 2013.
Existing backers got back about 47 percent of what they had invested, Miles said. Ownership in the new entity is split about evenly between BioClinica and CCBR-Synarc’s backers.